Hubris: How HBOS Wrecked the Best Bank in Britain (42 page)
Read Hubris: How HBOS Wrecked the Best Bank in Britain Online
Authors: Ray Perman,Alistair Darling
C
HAPTER
18: A
POCALYPSE NOW
1
Darling,
Back from the Brink
, location 1876
2
http://news.bbc.co.uk/1/hi/8375969.stm
3
http://www.bloomberg.com/data-visualization/federal-reserve-emergencylending/#/HBOS_PLC/?total=true&mcp=true&mc=true&taf=false&cpff=false&pdcf=false&tslf=false&stomo=false&amlf=false&dw=false/
4
Darling, location 2291
5
The Guardian
, 17 September 2008
6
The Daily Telegraph
, 16 September 2009
7
Presentation by Tim Tookey to UBS Global Financial Services Conference, New York 12 May 2009
8
Darling, location 2581
9
Brown,
Beyond the Crash,
65
10
Ellis & Taylor, Banks, bailouts and bonuses, 806
C
HAPTER
19: N
EMESIS STRIKES
1
Financial Times
, 13 November 2008
2
Financial Times
, 22 November 2008
3
The Daily Telegraph
, 17 November 2008
4
Financial Times
, 20 November 2008
5
Financial Times
, 13 December 2008
6
HBOS Interim Management Statement, November 2008
7
HBOS Trading Statement, November 2008
8
Financial Times
, 13 December 2008
9
The Sun
, 12 Jan 2011
10
Financial Times
, 14 February 2009
11
The Times,
25 February 2012
12
The Daily Telegraph
, 13 June 2011
13
Financial Times
, 7 June 2010
14
Financial Times
, 9 February 2010
C
HAPTER
20: H
UNGRY FOR RISK
1
Banking Crisis: dealing with the failure of the UK banks
, House of Commons Treasury Committee, HC 416, 1 May 2009,
8
2
Ellis & Taylor, Banks, bailouts and bonuses, 807
3
Banking Crisis: Vol. II Written Evidence
, House of Commons Treasury Committee, HC 144, 1 April 2009, 440 para
2.8
4
Ellis & Taylor, 807
5
Tim Tookey to UBS Global Financial Services Conference, New York, 12 May 2009
C
HAPTER
22: T
HE DRIVE FOR PROFIT AT ANY PRICE
1
Financial Services Authority FSA/PN/024/2012, 9 March 2012
C
HAPTER
23: W
HY DIDN
’
T THE REGULATORS STOP
HBOS
?
C
HAPTER
26: C
ALLED TO ACCOUNT – AT LAST
1
Parliamentary Commission on Banking Standards
‘An Accident Waiting to Happen: the Failure of HBOS
, Fourth
Report of Session 2012–13, Volume II. Oral and written evidence, published on 5 April 2013 by authority of the House of Commons London: The Stationery Office Limited
Oral evidence taken before the Parliamentary Commission on Banking Standards
3 December 2012 Sir James Crosby, Andy Hornby HC 606-xvi
4 December 2012 Lord Stevenson of Coddenham HC 606-xvii
C
HAPTER
27: R
ETRIBUTION OF A SORT
1
HL Paper 144 HC 705, published on 4 April 2013 by authority of the House of Commons London: The Stationery Office
Limited
B
OOKS
Armitage, David, ‘Paterson, William (1658–1719)’,
Oxford Dictionary of National Biography
(Oxford University Press, 2004), online edn, Sept 2010,
[http://www.oxforddnb.com/view/article/21538]
Brown, Gordon,
Beyond the Crash
(Simon & Schuster, 2010)
Brummer, Alex,
The Credit Crunch
(Random House Business, 2008)
Cameron, Alan, ‘Holland, John (1658–1721)’,
Oxford Dictionary of National Biography
, (Oxford University Press, 2004), online edn, Jan 2008, [http://www.oxforddnb.com/view/article/13531]
Cameron, Alan,
Bank of Scotland 1695–1995 a very singular institution
(Mainstream 1995)
Checkland, S.G.,
Scottish Banking, a history 1695–1973
(Collins, 1975)
Darling, Alistair,
Back from the Brink
(Atlantic Books, 2011), Kindle edition
Devine, T.M.,
The Scottish Nation 1700–2000
(Allen Lane, 1999)
Forrester, Andrew,
The man who saw the future
(Thomson Texere, 2004)
Green, David,
Queen Anne
(Collins, 1970)
Peston, Robert,
Who runs Britain?
(Hodder & Stoughton, 2008)
Saville, Richard,
Bank of Scotland: a history, 1695-1995
(Edinburgh University Press, 1996)
Watt, Douglas,
The Price of Scotland; Darien, Union and the Wealth of Nations
(Luath Press, Edinburgh, 2007)
A
NNUAL REPORTS & ACCOUNTS
HBOS, 2001–2010
Bank of Scotland, 1980–2000
Lloyds Banking Group, 2008–10
R
ESEARCH PAPERS
‘Banks, bailouts and bonuses: a personal account of working in Halifax Bank of Scotland during the financial crisis’, Vaughan Ellis and Margaret Taylor,
Work,
Employment & Society, December 2010
,
vol. 24
M. Oram and R. Wellins,
Re-engineering’s Missing Ingredient: The Human Factor
, IPD, 1995.
O
FFICIAL REPORTS
House of Commons Treasury Committee
Banking Crisis: dealing with the failure of the UK banks
, HC 416, 1 May 2009
Banking Crisis: Vol.I,
HC 261-I, 29 March 2010.
Banking Crisis: Vol.II Written Evidence
, HC 144, 1 April 2009
Parliamentary Commission on Banking Standards
An Accident Waiting to Happen: the Failure of HBOS
, fourth report of session 2012–13, vols I & II
Financial Services Authority
Bank of Scotland, Final Notice Ref: 169628 9, March 2012
Statement on HBOS, 11 February 2009
The Supervision of Northern Rock; Lessons Learned Review
, March 2008
The Failure of the Royal Bank of Scotland
, December 2011
Other
State aid No. N 428/2009 – United Kingdom: Restructuring of Lloyds Banking Group
, European Commission, Brussels, 18 November 2009
A review of corporate governance in UK banks and other financial industry entities
, Final recommendations, 26 November 2009. HM Treasury, 26 November 2009
Final Report
Independent Commission on Banking, 12 September 2011
1
By now the Governor was no longer a full-time appointment, but was nonexecutive chairman of the board of directors.
2
We who are about to die salute you – motto of the gladiators of Ancient Rome.
3
. See Preface.
4
. London Inter-bank Offered Rate: the interest rate at which banks trade among themselves.
5
. These rises in top pay were not out of line with the rest of the banking sector. Despite Lloyds’ less stellar performance
over the period, the total remuneration of the chief executive rose from £1,100,000 to £2,884,000.
6
I confess to having an MBA, but I have never been a banker.
7
I did my first radio interview at 5.30 a.m. on that day and in total was interviewed separately eight times for BBC radio and
television programmes. One interview for independent television was cut into three and used on Channel 4, ITV and STV news. Paul Moore and Andrew Tyrie MP were also extensively interviewed
across all television channels.
125 per cent mortgages
ref1
,
ref2
talks with Bank of Scotland
ref1
Act of Union
ref1
AIG
ref1
Alliance 38; Leicester
ref1
,
ref2
Bank of China
ref1
Bank of England
Bank of Scotland
Act of Scottish Parliament 1695
ref1
becomes ‘oil bank’
ref1
bid cost
ref1
bid tactics
ref1
bids for US banks
ref1
buys in NZ and Australia
ref1
Capital Bank
ref1
culture change
ref1
custodian philosophy
ref1
dismisses DCL approach
ref1
early securitisation
ref1
enters buy-out market
ref1
enters mortgage market
ref1
gap between lending and deposits
ref1
high RoE
ref1
HOBS electronic banking
ref1
HQ on The Mound
ref1
increases offer for NatWest
ref1
and Jacobite rising
ref1
joins FTSE100
ref1
last results
ref1
Latin American debt
ref1
launches NatWest bid
ref1
launches Sainsbury’s Bank
ref1
Lloyds makeover
ref1
Lloyds’ pledge
ref1
MBOs
ref1
Money Market Cheque Account
ref1
‘most admired bank’
ref1
opens Houston office
ref1
partnership with Pat Robertson
ref1
praise from
Lex
ref1
provides credit for M&S customers
ref1
rejected by Halifax
ref1
reliance on wholesale market
ref1
sells Countrywide
ref1
shuns derivatives
ref1
suffers first bank run
ref1
supports Cazenove
ref1
talks with Abbey National
ref1
tercentenary
ref1
watches Royal Bank revolution
ref1
Bankwest
ref1
,
ref2
,
ref3
,
ref4
,
ref5
bankers’ pay
ref1
Blank, Sir Victor
Bonnie Prince Charlie
ref1
Bowie, David
ref1
Bradford & Bingley
ref1
,
ref2
,
ref3
,
ref4
British Linen Bank
ref1
,
ref2
,
ref3
,
ref4
Brown, Gordon
ref1
,
ref2
,
ref3
,
ref4
,
ref5
,
ref6
,
ref7
Brown, Howard
ref1
building societies
ref1
,
ref2
,
ref3
,
ref4
,
ref5
,
ref6
Burt, Sir Peter
attacks RBS management
ref1
attempt to save Bank
ref1
becomes Chief Executive
ref1
becomes Treasurer
ref1
concedes NatWest defeat
ref1
early career
ref1
fears vulnerability
ref1
HBOS decision
ref1
management style
ref1
and Pat Robertson
ref1
plans NatWest bid
ref1
post-bid illness
ref1
rejects Barclays top job
ref1
rejects National Australia Bank
ref1
reorganises Bank
ref1
retires
ref1
salary increase
ref1
sells £2 million shares
ref1
standing ovation
ref1
talented golfer
ref1
talks with Crosby
ref1
Cable, Vince
ref1
Chartered Institute of Bankers in Scotland
ref1
,
ref2
,
ref3
,
ref4
,
ref5
City of Glasgow Bank
ref1
Clydesdale Bank
ref1
,
ref2
,
ref3
,
ref4
Committee of Scottish Clearing Bankers
ref1
Company of Scotland
see
Darien scheme
Co-operative Bank
ref1
Countrywide Bank
ref1
Crosby, Sir James
demanding targets
ref1
denies stepping down
ref1
Edinburgh flat
ref1
evidence to parliamentary commission
ref1
Halifax chief executive
ref1
HBOS chief executive
ref1
mortgage study
ref1
parliamentary commission criticism
ref1
relinquishes knighthood
ref1
resigns from FSA
ref1
retires early
ref1
salary increase
ref1
sold HBOS shares
ref1
Cummings, Peter
becomes head of corporate banking
ref1
calms fears
ref1
chairs credit committee
ref1
deal making
ref1
early career
ref1
evidence to parliamentary commission
ref1
increased bonus
ref1
pressure to boost profits
ref1
property speech
ref1
redundancy payment
ref1
relationship with Sir Philip Green
ref1
,
ref2
resigns
ref1
waives bonus
ref1
Daniels, Eric
Darling, Alistair
ref1
,
ref2
,
ref3
,
ref4
,
ref5
Dickson, Gordon
ref1
Dunfermline AFC
ref1
Duthie, Sir Robin
ref1
Ecclestone, Bernie
ref1
Ellis, Mike
Ellwood, Peter
ref1
Fannie Mae and Freddy Mac
ref1
Financial Services Authority (FSA)
ref1
,
ref2
,
ref3
,
ref4
Fitch
ref1
Forte, Sir Rocco
ref1
,
ref2
,
ref3
Garrick, Sir Ron
ref1
,
ref2
,
ref3
Gentlemen’s Agreement
ref1
,
ref2
Gibson, Archie
ref1
Glass-Steagall Act
ref1
Gleacher, Eric
ref1
Goldman Sachs
ref1
,
ref2
,
ref3
,
ref4
Goodwin, Fred
Grampian Funding
ref1
Grant, Sir Alistair
ref1
Green, Sir Philip
ref1
deal with Bank
ref1
Halifax
ref1
,
ref2
,
ref3
,
ref4
,
ref5
Harley, Ian
ref1
HBOS
£45 billion write-offs
ref1
125 per cent mortgages
ref1
40,000 jobs lost
ref1
advanced status
ref1
Arcadia dividend
ref1
Arrow assessment
ref1
Bank of England loans
ref1
‘cannot fund own expansion’
ref1
concerns over The Mound
ref1
corporate banking failures
ref1
culture
ref1
dependence on short-term funding
ref1
directors buy shares
ref1
expands branch network
ref1
‘flying blind’
ref1
FSA fine
ref1
funding problems
ref1
Grampian Funding
ref1
guilty of serious misconduct
ref1
haemorrhaging cash
ref1
high-pressure sales culture
ref1
,
ref2
leverage
ref1
leveraged buyouts
ref1
Lloyds deal outlined
ref1
loses £54 billion
ref1
merger cleared
ref1
mortgage share falls
ref1
mortgages repriced
ref1
name chosen
ref1
property exposure
ref1
raises new capital
ref1
record share price
ref1
reliance on wholesale funding
ref1
remuneration report
ref1
rides commercial property boom
ref1
rights issue flops
ref1
risk appetite
ref1
select committee report
ref1
share buy backs
ref1
share debut
ref1
shareholder disquiet
ref1
shares freefall
ref1
short of capital
ref1
small business blunder
ref1
stresses partnership
ref1
strong profit increase
ref1
sub-prime loans
ref1
takes Government capital
ref1
Heseltine, Lord
ref1
Higgins, Benny
ref1
Hodkinson, Phil
ref1
,
ref2
,
ref3
,
ref4
Holland, John
Hornby, Andy
ref1
£2 million incentive
ref1
becomes Chief Executive
ref1
bonuses taken in shares
ref1
called to resign
ref1
calms tempers
ref1
feeling stress
ref1
evidence to parliamentary commission
ref1
firesale
ref1
Halifax retail director
ref1
HBOS retail head
ref1
increased bonus
ref1
made Chief Operating Officer
ref1
new jobs
ref1
parliamentary commission criticism
ref1
resigns
ref1
sales-driven culture
ref1
sales letters
ref1
scraps targets
ref1
select committee evidence
ref1
‘state of panic’
ref1
‘very worried’
ref1